How Old is Your Estate Plan?

If you’re like most people you have a “set it and forget it” mindset when it comes to estate planning. You set up plans and documents years ago but haven’t looked at them since. Or, maybe you don’t have them set up at all. Knowing when to update your estate plan is a key part of making sure that your wishes will be fulfilled when the time comes. It can also provide clarity for ones who are left to fulfill those wishes.  There are many events that could trigger the need for updating your estate plan.

Some of the possible events include:

1. Marital Changes – Getting married or divorced can essentially require changing all of your estate documents. Don’t forget beneficiaries on employer plans and IRAs!
2. New children– You will want to ensure your children are well taken care of if anything were to happen to you. This would include selecting a guardian to name in your will and considering trusts for minor children.
3. Children reach age of majority– You may choose to change the age on the trusts you had in your will or changing your beneficiaries to list your children directly instead. This is very common for new parents to setup an estate plan when their children are born and then leave as is even when the child is grown. Once they reach age of majority your original wishes may need updating depending on your situation.
4. Death or serious illness– If a fiduciary or beneficiary passes away before you, you should update your estate documents to prevent potential complications for your estate.
5. Change in guardians or trustees– Over time you may realize that the guardian or trustee you choose will not be capable of fulfilling those duties and will need to reconsider.
6. Change of your state of residence – Different states have different laws so it is important to check to see if your documents are still valid if you were to move.
7. New state laws– Laws can change and this can alter the way you set up your estate. Check in with your attorney to make sure no new laws would require you to take another look at your estate plan.
8. A significant increase or decrease in the value of your estate – A big change to your asset level may affect how you wish to have them distributed.
9. Purchase or sell of a business – Would the business be sold or left to someone in your will? As a business owner it is also important to make sure you have adequate life insurance.
10. Change of goals – Perhaps you want to gift more to your children or include a charity. Reevaluate your goals as time passes. Knowing what your goals are for your estate is the first step to having a successful plan.

When you’re updating your estate plan don’t forget these parts of planning:

1. Beneficiaries on retirement accounts– These will override anything listed in your will, so make sure they fit in your overall estate plan.
2. Legal Documents- Most think of Wills, but Power of Attorney, Living Will, Healthcare Power of Attorney and Trusts are some things consider as well.
3. Account registration– Having “Joint Tenants with Rights of Survivorship” instead of multiple “individual” accounts will allow that asset to be handled outside of probate and make it easier for your spouse if anything were to happen to you.
4. Life Insurance– Your financial planner can help determine how much is appropriate based on your financial situation. Make sure to consider any policies you may have through your employer.
5. Communication– If you have named a guardian or trustee for minor children it is best to let them know when you are having your plans drawn up. Also, if you are married make sure to discuss these estate goals with your spouse to achieve a symmetrical strategy.

Any big life event can ultimately affect how you want your estate distributed. Contact your financial advisor today if your estate plan needs reviewing. If you’re interested in exploring your estate plan further, fill out the form below to receive our Estate Planning Checklist:

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